Correlation Between Arrow Managed and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Regional Bank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Arrow Managed and Regional Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Regional Bank Fund, you can compare the effects of market volatilities on Arrow Managed and Regional Bank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Arrow Managed with a short position of Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Regional Bank.
Diversification Opportunities for Arrow Managed and Regional Bank
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Arrow and Regional is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank and Arrow Managed is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Arrow Managed Futures are associated (or correlated) with Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Arrow Managed i.e., Arrow Managed and Regional Bank go up and down completely randomly.
Pair Corralation between Arrow Managed and Regional Bank
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 1.74 times more return on investment than Regional Bank. However, Arrow Managed is 1.74 times more volatile than Regional Bank Fund. It trades about -0.02 of its potential returns per unit of risk. Regional Bank Fund is currently generating about -0.06 per unit of risk. If you would invest 582.00 in Arrow Managed Futures on December 4, 2024 and sell it today you would lose (7.00) from holding Arrow Managed Futures or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Regional Bank Fund
Performance |
| Timeline |
| Arrow Managed Futures |
| Regional Bank |
Arrow Managed and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Regional Bank
The main advantage of trading using opposite Arrow Managed and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Regional Bank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Regional Bank will offset losses from the drop in Regional Bank's long position.| Arrow Managed vs. The Hartford Inflation | Arrow Managed vs. Ab Bond Inflation | Arrow Managed vs. Cref Inflation Linked Bond | Arrow Managed vs. Ab Bond Inflation |
| Regional Bank vs. Siit Small Cap | Regional Bank vs. Old Westbury Small | Regional Bank vs. Needham Small Cap | Regional Bank vs. Ab Small Cap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |